Trustee Diane G. Reed Seeks to Avoid Stock Transfer as Fraudulent Conveyance
November 2, 2021, Northern District of Texas – Trustee Diane G. Reed for the bankruptcy estate of The Lasalle Group, Inc. (“Debtor”) files an adversary proceeding against Defendant MWW Partners Consulting, LLC (“MWW”) to avoid and recover a transfer as a “fraudulent conveyance” under Section 544, 548, and 550 of the Bankruptcy Code.
The complaint alleges that The Lasalle Group assigned and transferred certain stocks to MWW and “received no consideration” in exchange either from the Debtor or its CEO, Mitchell Warren. The complaint further asserts that MWW is an “insider” of LaSalle by virtue of common ownership of MWW and the Debtor. Finally, the complaint contends that Debtor’s CEO made the stock transfer to MWW with actual intent to hinder, delay, and defraud LaSalle’s creditors in recovering the debts owed to them by removing a valuable asset from the Debtor.
The Trustee enlists various “badges of fraud” to evidence MWW’s and Warren’s “actual fraudulent intent”, such as transfer being made to an “insider”, “concealing” the transfer from Debtor’s creditors, etc. Accordingly, the Trustee urges the Court to award judgment to avoid the stock transfer and direct MWW to return the shares.
In re The Lasalle Group, Inc. Case No. 19-31484-SGJ-7
